A potential ideal storm could be imminent as brand-new research reveals that the bounce-back of the rental market complying with Covid-19 might incorporate with incoming electric checks legislation, causing a backlog of administration for landlords.
According to national service provider of residential property certificates, PropCert, with even more relocations anticipated to occur in the coming weeks, around the exact same time the brand-new regulation is introduced, transactions could be postponed unless residential property experts have the necessary procedures in position to manage increased demand for electrical safety and security checks.
Following the reopening of the property market on May 13 as well as the recurring easing of lockdown procedures, activity in the rental market has risen. According to Goodlord, both brand-new as well as finished tenancy applications eclipsed 2019 levels in the very first 2 weeks of June as suppressed rental need continues to be launched.
On June 2, new applications were 122% up on the quantity tape-recorded on the very same day in 2015. Further research from Knight Frank reveals that the variety of new potential occupants in the week finishing June 6 was 40% higher than the five-year standard and also the second-highest figure tape-recorded this year.
Tom Harrington, Managing Director of PropCert, says: “It’s pleasing to see the rental market bounce back so strongly post-lockdown. The next few months looks set to be an extremely busy period for the rental market as tenants looking to move before lockdown make their move, while those who have decided they want to relocate in recent weeks also enter the market.
“However, with new legislation coming into force next month, the administrative burden on agents and landlords is set to increase further still”.
The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 come into force on July 1.
The new regulations will require landlords to provide an EICR report before the start of all new tenancies. All fixed electrical installations must then be inspected and tested at least every five years by a qualified professional.
Landlords will also be required to obtain a copy of the test report and supply it to all tenants within 28 days, while also retaining a copy for themselves until the next inspection is due.
From April 1 2021, the rules will be extended to cover all existing tenancies.
Harrington explains: “Agents and landlords will now need to process more electrical checks than ever before and this means that the electricians they usually work with may not be able to keep up with demand.
“If electricians are unable to meet demand and checks are not carried out, this backlog could lead to tenancies being delayed or falling through, which would be highly counter-productive as the market continues to recover from the effects of Covid-19.”
“Moreover, it’s hugely important that electrical checks are carried out to a professional standard in order to ensure tenants’ safety and comply with the regulations. Failure to do so could see agents or their landlords hit with significant financial penalties,” he says.
Handling high volume of electrical checks will be crucial
According to PropCert, agents and landlords need to make sure they have the systems in place to effectively handle the introduction of the new regulations.
Harrington adds: “Electrical safety checks will need to be turned around quickly and efficiently in order to meet demand and keep the rental market moving.
“This means having access to a higher number of electricians will be vital, while being able to manage checks electronically will save time, helping landlords and agents to keep on top of things.”
Harrington explains that the compliance obligations for granting a new tenancy are higher than ever before and the requirement for mandatory electrical safety checks will add to the workload of letting agents and landlords who are still dealing with the consequences of the pandemic.
He concludes: “That’s why we provide property professionals with access to a database of over 250 electricians nationwide. Our portal also allows customers to place orders online, track with real-time updates and store their certificates securely.
“Our technology and fast turnaround times can help agents and landlords to get their heads around another new piece of legislation. We’re here to support property professionals so they can provide a seamless and efficient service, while also ensuring compliance.”